Last week, in his State of the Union address, President Obama embraced the first two: “Already, the Affordable Care Act is helping to slow the growth of health care costs,” he noted. “The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.” (In time, I suspect that the administration also will call for a ban on those decidedly seamy “pay for delay” deals.)

The administration pays attention to CAP. Recently Bloomberg News described CAP as “the intellectual wellspring for Democratic policy proposals, including many that are shaping the agenda of the Obama administration.” This suggests that the report’s proposals may offer a preview of “adjustments to Medicare spending” that the president would consider.

How would CAP save $358 billion without rationing benefits or shifting costs to middle-class seniors? The report focuses on squeezing waste out of the system. Waste doesn’t help beneficiaries.

During recent fiscal cliff negotiations, Democrats and Republicans agreed to adopt four of CAP’s proposals, and I suspect that, over time, we will see more of its recommendations become part of the reality of health care reform.

Recently, I interviewed CAP president NeeraTanden and Topher Spiro, CAP’s managing director for health policy. I was impressed by how their practical approach differs from conservative strategies for slicing “entitlements.”Continue reading →

At 4:30 this afternoon, CNN updated its story: “Both sides agree the wealthy will pay more, so now fiscal cliff talks come down to how much Republicans can wring out of the White House in return for giving in on taxes.

“To President Barack Obama, it’s all about first locking in additional revenue from raising taxes on high-income owners, an outcome the GOP has long rejected.”

President Obama had made it clear that negotiations over government spending on safety nets such as Medicare wouldn’t begin until Republicans accepted a higher marginal tax rate for individuals earning over $200,000 and couples earning over $250,000.

The president dug in, and, according to CNN, he has won round one.

“Retiring Republican Rep. Steve LaTourette of Ohio told CNN on Thursday that he sensed a shift in the House GOP approach during a conference meeting the day before.

“A GOP source told CNN that talks between staff members on both sides resumed Thursday for the first time this week, after Obama and Boehner spoke by phone the day before.”

A Two-Step Approach

It is not clear whether negotiations over so-called “entitlements” will be concluded before the end of the year. But CNN, reports

“Even conservatives such as Oklahoma Sen. Tom Coburn and Louisiana Gov. Bobby Jindal acknowledge the obvious — taxes on the wealthy are going up despite opposition by Republicans.

“‘Whatever deal is reached is going to contain elements that are detrimental to our economy,’ Jindal wrote Thursday in an opinion piece published by Politico. ‘Elections have consequences, and the country is going to feel those consequences soon.’”

Obamacare will “keep unemployment high,” Tanner claims, because under reform legislation, businesses that have at least 50 employees working over 30 hours a week are expected to offer their workers affordable health insurance. If they choose not to, and more than 30 of their employees qualify for government subsidies to help them purchase their own coverage, the employer must pay a penalty of $3,000 for each worker who receives a subsidy— up to a maximum of $2,000 times the number of the company’s full-time employee minus 30. (The Kaiser Family Foundation offers an excellent graphic explaining the rule.)

Below, a guest post from Stephen Reid, Managing Partner at Pharmspective, a market research firm that provides advisory services to healthcare and pharmaceutical companies on strategic issues including the Affordable Care Act. (ACA)

I don’t agree with Reid on every point. (For example, if Republicans take both the White House and the Senate, I believe that they could and would eliminate both the premium subsidies that will make insurance affordable for middle-class Americans and the mandate.) Nevertheless, when he sent his Op-ed to me I was impressed by how well he understands the legislation. A great many moderates have been confused by the arguments coming at them both from the left and from the right. A combination of misinformation, half-truths and fear-mongering has created so much “noise” that it has become extremely difficult to separate fact from fiction.

By contrast, Reid does a very good job of explaining the reasoning behind the Affordable Care Act, and how its “checks and balances” work. I agree with him that the legislation is far from perfect, but it represents a good beginning.

There is just one major aspect of reform that I think Reid doesn’t understand: the rationale for expanding Medicaid. See my note at the end of his post.

A Centrist Perspective: Makers, Takers and Obamacare

by Stephen Reid

With a few days left before we elect a president, the prevailing belief is that an Obama win would propel the Affordable Care Act (ACA) forward with little delay and a Romney win would kill it. Both parties have gone to great lengths to characterize healthcare reform; the Democrats tout the legislation as essential to addressing a broken healthcare system that results in the U.S. spending twice as much as most developed countries on healthcare while leaving 50 million people without coverage; the Republicans cite the ACA as an example of hopeless dependency on government and contrary to free-market principles and individual rights.

I quoted Greenstein in April, in a post that originally appeared on HealthInsurance.org. There, I explained that Ryan’s budget would shift Medicare costs to seniors and slash Medicaid, while simultaneously offering tax breaks for Americans perched on the top of a our income ladder.

Under the newest version of the Ryan plan, Washington would give seniors a voucher equal to the cost of the second-cheapest private-sector Medicare plan in their region. In theory, this gives seniors “choice” — the opportunity to pick a Medicare policy that best suits their needs, and their pocketbook.

I originally published this post on HealthInsurance.org (www.healthinsurance.org) Check there for other posts on the election–just click on “Blog” at the top of the page.

Ted Kennedy’s speech at the 1980 Democratic convention still echoes in my mind. It remains the finest, most inspiring political oration that I have ever heard. Kennedy was speaking from a position of defeat. He had just lost the Democratic nomination to Jimmy Carter.

And yet this was a full-hearted, rousing speech delivered by a man who realized that in the battle ahead, the issues at stake were far, far more important than his own loss. Intuitively, he knew that the country had reached a turning point. (You can listen to the speech at The History Place.

At that moment, Conservatives were ready to launch a revolution, and they would succeed. In November, Ronald Reagan won the White House, and his administration would set the tone for much of the next 30 years. Tax cuts for the rich, deregulation, a campaign to privatize both Social Security and Medicare. Health care reform would be off the table for many years.

Kennedy saw the danger ahead and addressed it: “My fellow Democrats and my fellow Americans, I have come here tonight, not to argue as a candidate but to affirm a cause. I’m asking you–to renew the commitment of the Democratic Party to economic justice.

“I am asking you to renew our commitment to a fair and lasting prosperity that can put America back to work.” Then, as now, unemployment was a pressing issue. In April of 1980, the unemployment rate jumped to 6.9%; in May it hit 7.5%. “Let us pledge that employment will be the first priority of our economic policy,” Kennedy declared. “We will not compromise on the issue of jobs.”

Universal Coverage “The Passion of My Life”

Kennedy understood that “we cannot have a fair prosperity in isolation from a fair society. So,” he declared, “I will continue to stand for a national health insurance.”

“We must not surrender to the relentless medical inflation that can bankrupt almost anyone and that may soon break the budgets of government at every level. Let us insist on real control over what doctors and hospitals can charge, and let us resolve that the state of a family’s health shall never depend on the size of a family’s wealth.”

In a nation divided, “compromise” has become an extraordinarily appealing idea. Weary of the acrimony and endless wrangling, more and more Americans are asking: Why can’t conservative and liberal politicians come together and forge bipartisan solutions to the problems this nation faces?

In Congress, where polarization has led to paralysis, some argue that Republican leaders are responsible for creating gridlock by insisting on “party discipline.” But liberals in Washington also are accused of “dividing the nation.” Even President Obama, who set out to unite the country, has been described as “the most polarizing president ever.” During his third year in office, Gallup reports, “an average of 80 percent of Democrats approved of the job he was doing, as compared to 12 percent of Republicans who felt the same way. That’s a 68-point partisan gap, the highest for any president’s third year”–though this may say more about the temper of the times than the man himself. Nevertheless, many commentators believe that progressives, like conservatives, need to cede ground. The debate has become too contentious, too “political,” they say. I disagree. There are times when we cannot “split the difference.” Too much is at stake. We must weigh what would be won against what would be lost.

But reporters who have been taught that they must be “fair” and “balanced” often write as if all points of view are equally true. After all, they don’t want to be accused of “bias.” Thus they fall into the trap of what veteran Supreme Court reporter Linda Greenhouse calls “he said, she said” journalism. To them, the “middle ground” seems a safe place– a fair place– to position a story.

This may help explain why so many bloggers and newspaper reporters are calling for “bi-partisan consensus” as they comment on some of the most important issues of the day.

Global Warming

Writing about global warming, Huffington Post senior writer Tom Zeller Jr. recently declared: “Compromise is the necessary first step to tackling the problem. What ordinary Americans really want is for honest brokers on all sides to detoxify and depoliticize the global warming conversation, and then get on with the business of addressing it. That business will necessarily recognize that we all bring different values and interests to the table; that we perceive risks and rewards, costs and benefits differently; and it will identify solutions through thoughtful discussion and that crazy thing called compromise.” [ my emphasis] (Hat tip to David Roberts (Twitter’s “Dr. Grist”) for calling my attention to this post.)

Out of the rubble of the failed budget deficit negotiations, it seems a new movement is afoot to transform Medicare into a “premium support” program with the goal of moving more seniors and the disabled into the private insurance market.

When the health reform bill was passed in 2009, it looked like the end of the gravy chain for Medicare Advantage plans; the privately-run health care plans that are sold to seniors as an alternative to traditional, government fee-for-service Medicare. The Affordable Care Act cuts $136 billion over 10 years from Medicare Advantage, following years of concern over the fact that the plans cost the government about 14% more (about $12 billion a year) than traditional Medicare. These overpayments allowed MA plans to offer perks like vision, dental and prescription benefits as well as lower out-of-pocket costs for some subscribers. Now about one-quarter of all seniors are covered under these plans.